You are here: Home > Business > Barter System
Barter System
by Administrator | 7 Comments | 68999 Views | 3.6/5 Rating | 
Print This Article 833 articles online.
Mar 16th, 2010
Send to friend
Barter System is that system in which goods are exchanged for goods. In ancient times when money was not invented trade as a whole was on barter system. This was possible only in a simple economy but after the development of economy, direct exchange of goods without the use of money, was not without defects. There were various defects in this system. These were the following;
1. Double Coincidence of Wants:
Exchange can take place between two persons only if each possesses the goods which the other wants e.g., if a weaver needs shoes and he has cloth to offer in exchange he should not only find a cobbler who makes shoes, but find such cobbler who needs cloth and is prepared to give shoes in exchange for it. In this case, it was difficult to find such a person.
2. Absence of Standard Value:
Under barter system there was no measure of value. Even if two persons met together who wanted each other goods, they could not
find a satisfactory equilibrium price. Under such conditions one party had to suffer.
3. Indivisibility of Commodities:
It was difficult to divide a commodity without loss in its value e.g., a man who wants to purchase cloth equal to half the value of his cow and other commodities for the rest half value of cow; he could not divide his cow.
4. Absence of Store of Value:
Wealth cannot be easily stored for future use in the form of commodities because they perish in the long run.
In the modern economy barter system cannot succeed. Money is indispensable for large scale production. The functions of money are the same which were defects in barter system. Its functions in modern economy are:
a) Money is a matter of functions four
b) A medium, a measure, a standard and Store
Now it is clear that functions of money have removed those difficulties which were in barter system.
Article Source: http://www.informationbible.com/article-barter-system-13.html
-
What does it take to properly franchise your business? How much should you budget when planning out a budget? More >>
-
What is the right text marketing strategy for your business
Text marketing is a new strategy used by businesses of all sizes. It has been proven to be a more valuable, and more effective, form of marketing than any other mobile marketing strategy. More >>
-
Your wedding day is coming closer and if there is one thing you wish for most, it is appear best on your unique day. More >>
-
Something you need to know about windows 8
Microsoft is working on an update to Windows 8 and RT and will be releasing a preview version of it in June More >>
-
Orange county seo provides convincing service and methodology
It has become so much easier today than it was fifty years ago running an online business. More >>
-
Barter System - Barter System is that system in which goods are exchanged for goods - Barter System More >>
-
Objectives of Business means the purpose for which the business is established. It is generally believed that the main objective of business is ta make profit and avoid loss. More >>
-
Functions of Money - Functions of Money as a Medium of Exchange, Measure of Value, Deferred Payment, Store of Value - Functions of Money More >>
-
Importance of business in the present day world
The importance of business is that it provides products or services to customers. More >>
-
The partners of a firm are broadly divided into three main categories. General Partners, Special Partners and Other Partners. More >>
(1:06 am, 2013.03.10)
(8:57 pm, 2013.03.08)
(10:09 am, 2013.01.23)
(1:33 am, 2012.11.23)
(11:36 pm, 2012.11.10)
(11:47 am, 2012.10.04)
(1:22 pm, 2012.06.02)